TRIPS Agreement and Generic Medicine Access: How Global Patent Rules Affect Healthcare

Imagine needing a life-saving drug, but it costs $1,000 a month. Now imagine a generic version available for $10. That's the reality for millions, and it all comes down to international patent rules like the TRIPS Agreement.

What is the TRIPS Agreement?

TRIPS Agreement is a worldwide legal framework that sets minimum standards for intellectual property protection across countries. It was created in 1994 as part of the Uruguay Round negotiations and took effect in 1995. Administered by the World Trade Organization (WTO), which has 164 member countries, it covers patents, copyrights, trademarks, and other IP rights. For medicines, TRIPS requires 20 years of patent protection from filing date.

This agreement transformed global healthcare. Before TRIPS, countries like India didn't grant product patents for drugs. They made generic versions of HIV medications for $1 a day. After TRIPS, those same drugs cost $1,000 a month in many places. Patent rules became the main barrier between patients and life-saving treatments.

How TRIPS blocks affordable medicines

TRIPS forces countries to protect pharmaceutical patents for 20 years. During that time, companies charge high prices without competition. This hits hardest in low- and middle-income countries (LMICs). The World Health Organization (WHO) reports 2 billion people lack regular access to essential medicines, with patent barriers causing 80% of this gap in LMICs.

For example, a patented cancer drug might cost $100,000 a year in the U.S. but $500,000 in Africa due to import restrictions. Generic versions could cut that to $500, but TRIPS makes producing them illegal without special permission. This isn't just about money-it's about lives. In 2022, the global pharmaceutical market reached $1.42 trillion, yet 89% of U.S. prescriptions use generics while only 28% of LMICs do.

Key flexibilities: Compulsory licensing and the Doha Declaration

TRIPS includes "flexibilities" meant to help during health crises. The biggest tool is compulsory licensing. This lets governments authorize generic production without the patent holder's permission during emergencies. The Doha Declaration (2001) confirmed countries can use this for public health needs.

But there's a catch. The original TRIPS rule (Article 31f) says compulsory licenses must be "predominantly for the domestic market." This blocked countries without drug factories from importing generics. The Article 31bis system (2005 amendment) tried to fix this by allowing cross-border trade of licensed generics. However, the process is so complex it's been used only once: Rwanda imported HIV medication from Canada in 2012 after four years of paperwork.

Real-world challenges and examples

Here's how countries have navigated TRIPS rules:

• South Africa: In 1997, the country passed a law allowing generic imports and compulsory licensing for HIV drugs. Pharmaceutical companies sued, but withdrew the lawsuit after global protests. By 2008, treatment costs dropped from $10,000 to $87 per patient annually.
• Thailand: In 2006-2008, Thailand issued compulsory licenses for HIV, heart disease, and cancer drugs. Prices fell by 30-80%, but the U.S. imposed trade sanctions, costing $57 million in annual export losses.
• Rwanda: In 2012, Rwanda became the only country to use the Article 31bis system. It imported HIV medication from Canada after 4 years of complex negotiations. The final price was still 30% higher than if Rwanda had domestic manufacturing.

A 2019 study found 92% of LMICs lack dedicated staff to handle compulsory licensing. Many countries avoid using flexibilities due to fear of political retaliation. Between 2007-2015, the UN documented 423 trade retaliation threats against countries considering compulsory licensing.

Current developments and reforms

The pandemic brought new pressure. In October 2020, India and South Africa proposed a TRIPS waiver for COVID-19 vaccines and treatments. The WTO approved a limited version in June 2022, but it only covers vaccines-not diagnostics or therapeutics. The UN's September 2024 pandemic meeting called for "reform of the TRIPS Agreement to ensure timely access to health technologies during health emergencies."

Organizations like the Medicines Patent Pool (MPP) have helped. By 2022, MPP covered 118 LMICs with generic HIV drugs, but only 44 patented medicines total. Meanwhile, "TRIPS-plus" clauses in trade deals (like the U.S.-Jordan agreement) extend patent terms by 4.7 years on average, reducing generic competition by $2.3 billion yearly across 34 LMICs.

Frequently Asked Questions